ByJustin MoyerSeptember 12, 2011

Some open questions: Did the New Deal work, or did we need World War II to escape the Great Depression? Did the Soviet Union’s collapse prove Marx wrong? Should we return to the gold standard? Post-Bear Stearns, does America need stimulus or austerity? If free markets are superior to command economies, why is the US teetering at the brink of a double-dip recession and the Eurozone in crisis?

Why don’t economists know more? Sylvia Nasar’s Grand Pursuit: The Story of Economic Genius sidesteps this elephant in the Fed’s Board Room by, well, focusing on what they do know. “Nobody debates any longer whether we should or shouldn’t control our economic circumstances, only how,” Nasar writes. “Rather than a history of economic thought, the book in your hands is the story of an idea that was born in the golden age before World War I.”

Like Robert L. Heilbroner’s 1953 classic “The Worldly Philosophers,” “Grand Pursuit” traces the evolution of economics through personalities, or “protagonists who were instrumental in turning economics into an instrument of mastery”: Friedrich Engels, Joseph Schumpeter, Irving Fisher and other theoretical all-stars who helped policymakers understand that poor people might not have to be poor. As she’s shown before, Nasar is good at finding a compelling story amid academic drudgery. Author of the John Nash biography “A Beautiful Mind,” Nasar turned a schizophrenic, allegedly anti-Semitic mathematician into Russell Crowe. “Grand Pursuit’s” triumphant thinkers get a similar treatment – not hagiography, but dramaturgy.

For Nasar, Austrian economist Friedrich Hayek, a lonely critic of government intervention just as Europe was gearing up for World War II, is an exile in Cambridge where his “deafness epitomized his isolation.” “The Accumulation of Capital” by Joan Robinson, who defended John Maynard Keynes’s “General Theory” as well as Chairman Mao’s totalitarian regime, is the unlikely work of a debutante “being groomed to support a husband’s career rather than to pursue one of her own.” And Bengalese economist Amartya Sen’s complex theoretical innovations are more remarkable because of his brutal colonial childhood.“The landlady of his rooming house, who had begged the college not to send her ‘Coloreds,’ fussed at him about such things as drawing the curtains at night,” Robinson writes of Sen’s journey to Cambridge from Calcutta, where he survived primitive treatment for oral cancer. “The effects of the radiation appeared: weeping skin, ulcers, bone pain, raw throat, difficulty in swallowing.... the misery lasted for nearly six months.”

Keynes, however, is “Grand Pursuit’s” superman. A closeted homosexual “recognized as a genius in adolescence,” Keynes was reviled for speaking out against burdensome reparation payments in the Treaty of Versailles after World War I. “Keynes blasted the treaty as a rank betrayal by the older generation of political leaders,” Nasar writes. “Not only had the Big Four done nothing to restore the prewar European economy, but they had not seriously considered the need to do so.”

After a great depression and another world war, the Marshall Plan would show the power of Keynes’s once-heretical belief that victors shouldn’t charge vanquished, but help them rebuild. “By 1941, Keynesians were scattered around the wartime bureaucracy in Washington like raisins in a cake,” Nasar writes.But Nasar’s focus on big names means she overlooks smaller ones. At 77, Sen is the youngest economist she profiles. Prominent Keynesian John Kenneth Galbraith wrote almost 50 books; Nasar gives him three pages. Post-Marxist Jean Baudrillard, whose “Symbolic Exchange and Death” offers a damning theoretical indictment of capitalism, doesn’t merit a mention. Quibbles over who’s left out of this who’s who aside, “Grand Pursuit’s” grander problem is that it’s a good book that comes at a bad time.

“Keynes and Hayek never fully resolved their long-running debate over how much and what kind of government intervention in the economy is compatible with a free society,” Nasar writes. Yet, this unresolved debate, dismissed in an aside, is the root of President Obama and Republicans’ inability to compromise on the national deficit, the trade deficit, entitlement reform, tax reform, health care and climate change. (Ron Paul and Michele Bachmann take note: Nasar offers a more nuanced view of Hayek, who claimed “We cannot seriously argue that the government ought to do nothing.” ) A history of an almost century-old ideological feud is interesting, but doesn’t pick a winner. In 2011, as European markets tumble and China challenges the West for economic dominance, a winner is what we need.